Red Star closure hits 260 jobs
THE Red Star rail-based express parcel delivery firm is to close with the loss of 260 jobs. Its sudden demise, greeted with union outrage, came just 48 hours after The Herald exclusively revealed rival rail freight firms were losing business because manufacturers in the Highlands were switching to roads to send goods as far as the continent. Red Star’s demise coincided with a keynote speech to the Scottish rail freight conference by Lewis Macdonald, Scotland’s deputy transport minister. Un-aware of the collapse, he described the event in Perth as the industry’s “high point of the year”. Mr Macdonald also leapt on a conference announcement by EWS of plans to extend rail parcel services to Aberdeen and Inverness by the end of this year. However, as he spoke, unions were being told by Nuneaton-based Red Star it was closing its UK offices after exploring all options to maintain the business.
It said it had been badly hit financially by disruption in the wake of the Hatfield crash. Rail Maritime and Transport Union members agreed a 10% wage cut four years ago to help the company. Bob Crow, RMT general secretary, said the redundancies would take effect next Wednesday and added: “After six years of privatisation, our members have been given just a few days’ notice to quit their jobs . . . it is a total outrage.” British Rail sold Red Star to a management buy-out team in 1995. Labour fury followed when it was revealed the £38m-a-year business had been bought for £1.
While ministers searched for a buyer, Red Star went from being a profitable £70m business to making an annual loss. It was sold again in 1999, to Lynx Express, which yesterday confirmed its rail parcel deliveries were ending. The closure damages government plans to promote 80% growth in rail freight over the next 10 years. In Scotland, the target is to remove 18 million lorry miles from roads by March 2002, Mr Macdonald said in his speech yesterday.
EWS, Britain’s largest rail freight operator, was also unaware of Red Star’s
collapse as it told of plans to extend parcel services, currently from the
Midlands to Glasgow, to the north of Scotland. It confirmed on Monday that
daily West Highland freight traffic had fallen by
one third because Arjo Wiggins, the Fort William-based paper manufacturer,
now
sends its products by road to Belgium. British Alcan, which makes
aluminium at Lochaber, is set to follow – with
Freightliner now offering to deliver ingots to a Welsh finishing plant by
lorry, after warnings its rail contract is under review. In his speech, Mr
Macdonald referred to The Herald report on West Highland
withdrawals – stressing track access charges “will remain a pressing
issue
for customers and operators”.THE HERALD, 17th May 2001
